hpilrra08_1216.htm - Generated by SEC Publisher for SEC Filing










 








REGISTRATION
RIGHTS AGREEMENT


 


This
Registration Rights Agreement ("Agreement"), dated August 12, 2016,
is made by and between HPIL HOLDING, a Nevada corporation
("Company"), and KODIAK CAPITAL GROUP, LLC a Delaware limited
liability company (the "Investor").


 


RECITALS


 


WHEREAS, upon
the terms and subject to the conditions of the Equity Purchase Agreement (together
the "Purchase Agreement"), between the Investor and the Company, the
Company has agreed to issue and sell to the Investor shares (the "Put
Shares") of its common stock, $0.0001 par value per share (the
"Common Stock") from time to time for an aggregate investment price
of up to Five Million Dollars ($5,000,000) (the "EPA Securities"); and


 


WHEREAS, to
induce the Investor to execute and deliver the Purchase Agreement, the Company
has agreed to provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "Securities Act"), and
applicable state securities laws with respect to the EPA Securities and any
securities issued or issuable with respect to any of the foregoing by way of
exchange, stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise (the “Registered Securities”).


 


NOW, THEREFORE,
in consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Investor hereby agree as follows:


 


1.           Definitions. 


 


(a)          As used in this
Agreement, the following terms shall have the following meaning:


 


(i)          "Execution Date"
means the date of this Agreement.


 


(ii)         "Investor"
has the meaning set forth in the preamble to this Agreement.


 


(iii)        "Register,"
"registered" and "registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the
Securities Act or any successor rule providing for offering securities on a
delayed or continuous basis ("Rule 415"), and the declaration or
ordering of effectiveness of such Registration Statement by the United States
Securities and Exchange Commission (the "SEC").


 


(iv)       "Registered
Securities" will have the same meaning as set forth in the Purchase
Agreement.


 


(v)      
"Registration Statement" means the Company’s registration statement on Form S-1, or any similar
registration statement of the Company filed with SEC under the Securities Act
with respect to the Registered Securities.


 


(vi)        
 "EDGAR"
means the SEC's Electronic Data Gathering, Analysis and Retrieval System.


 


(vii)        “Exchange Act” means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
SEC thereunder, all as the same will then be in effect.


 


(b)           Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement.


  


2.            Obligation of
the Company. In connection with the registration of the Registered Securities,
the Company shall do each of the following:










 










 








 








 


(a)          Prepare promptly
and file with the SEC by November 30, 2016, a Registration Statement with
respect to not less than the maximum allowable under Rule 415 of Registered
Securities, and thereafter use all commercially reasonable efforts to cause
such Registration Statement relating to the Registered Securities to become
effective within five (5) business days after notice from the Securities and
Exchange Commission that such Registration Statement may be declared effective,
and keep the Registration Statement effective at all times prior to the
termination of the Purchase Agreement until the earliest of (i) the date that
is three months after the completion of the last Closing Date under the
Purchase Agreement, (ii) the date when the Investor may sell all Registered
Securities under Rule 144 without volume limitations, or (iii) the date the
Investor no longer owns any of the Registered Securities (collectively, the
"Registration Period"), which Registration Statement (including any
amendments or supplements, thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;


 


(b)     Prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the Registration
Statement effective at all times during the Registration Period, and to comply
with the provisions of the Securities Act with respect to the disposition of
all Registered Securities of the Company covered by the Registration Statement
until the expiration of the Registration Period.


 


(c)          With respect to
the Registered Securities, upon written request by the Investor, permit counsel
designated by Investor to review the Registration Statement and all amendments
and supplements thereto a reasonable period of time (but not less than two (2)
business days) prior to their filing with the SEC, and not file any document in
a form to which such counsel reasonably objects.


 


(d)       As promptly as
practicable after becoming aware of the following facts, the Company shall
notify Investor and Investor’s legal counsel
identified to the Company and (if requested by any such person) confirm such
notice in writing no later than one (1) business day thereafter (i): (A) when a
prospectus or any prospectus supplement or post-effective amendment to the
Registration Statement is filed; (B) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registered Securities or the
initiation of any proceedings for that purpose; and (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registered Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose.


 


(e)          Unless available
to the Investor without charge through EDGAR, the SEC's website or the
Company's website, furnish to Investor, promptly after the same is prepared and
publicly distributed, filed with the SEC, or received by the Company, one (1)
copy of the Registration Statement, each preliminary prospectus and the
prospectus, and each amendment or supplement thereto;


 


(f)          Use all
commercially reasonable efforts to (i) register and/or qualify the Registered
Securities covered by the Registration Statement under such other securities or
blue sky laws of such jurisdictions as the Investor may reasonably request and
in which significant volumes of shares of Common Stock are traded, (ii) prepare
and file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof at all times during the
Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualification in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registered Securities for sale in such jurisdictions: provided,
however, that the Company shall not be required in connection therewith or
as a condition thereto to (A) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(f), (B)
subject itself to general taxation in any such jurisdiction, (C) file a general
consent to service of process in any such jurisdiction, (D) provide any undertakings
that cause more than nominal expense or burden to the Company or (E) make any
change in its charter or by-laws or any then existing contracts, which in each
case the Board of Directors of the Company determines to be contrary to the
best interests of the Company and its stockholders;


 










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(g)          As promptly as
practicable after becoming aware of such event, notify the Investor of the
happening of any event of which the Company has knowledge, as a result of which
the prospectus included in the Registration Statement, as then in effect,
includes any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
("Registration Default"), and promptly prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and take any other
commercially reasonable steps to cure the Registration Default, and, unless
available to the Investor without charge through EDGAR, the SEC's website or
the Company's website, deliver a number of copies of such supplement or
amendment to the Investor as the Investor may reasonably request.


 


(h)          Use its commercially reasonable efforts
to secure quotation for such Registered Securities on the OTCQB, OTCQX or
OTCPink markets;


 


(i)          Provide a
transfer agent for the Registered Securities (the “Transfer Agent”) not later
than the Execution Date under the Purchase Agreement;


 


(j)          Cooperate with
the Investor to facilitate the timely preparation and delivery of certificates
for the Registered Securities to be offered pursuant to the Registration
Statement and enable such certificates for the Registered Securities to be in
such denominations or amounts as the case may be, as the Investor may
reasonably request and registration in such names as the Investor may request;
and, within five (5) business days after a Registration Statement which
includes Registered Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel selected by the Company to
deliver, to the Transfer Agent (with copies to the Investor) an appropriate
instruction and opinion of such counsel, if so required by the Transfer Agent;
and


 


(k)          Take all other
commercially reasonable actions necessary to expedite and facilitate
distribution to the Investor of the Registered Securities pursuant to the
Registration Statement.


  


3.          Obligations of
the Investor. In connection with the registration of the Registered Securities,
the Investor shall have the following obligations;


 


(a)          It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registered
Securities of the Investor that the Investor shall timely furnish to the
Company such information regarding itself, the Registered Securities held by
it, and the intended method of disposition of the Registered Securities held by
it, as shall be reasonably required to effect the registration of such
Registered Securities and shall timely execute such documents in connection
with such registration as the Company may reasonably request.


 


(b)          The Investor by
such Investor’s acceptance of
the Registered Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder; and


 


(c)          The Investor
agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 2(d)(ii) or (iii) or 2(g) above, the
Investor will immediately discontinue disposition of Registered Securities
pursuant to the Registration Statement covering such Registered Securities
until the Investor receives the copies of the supplemented or amended
prospectus contemplated by Section 2(d)(ii) or (iii) or 2(g) and, if so
directed by the Company, the Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in the Investor’s possession, of
the prospectus covering such Registered Securities current at the time of
receipt of such notice.


 


4.           Expenses of
Registration.         All reasonable
expenses incurred in connection with registrations, filings or qualifications
pursuant to Section 2, including, without limitation, all registration,
listing, and qualifications fees, printers and accounting fees, the fees and
disbursements of counsel for the Company shall be borne by the Company.


 


5.            Indemnification.         After Registered
Securities are included in a Registration Statement under this Agreement:










 










 








 








 


(a)          To the extent
permitted by law, the Company will indemnify and hold harmless, the Investor,
the directors, if any, of such Investor, the officers, if any, of such
Investor, each person, if any, who controls the Investor within the meaning of
the Securities Act or the Exchange Act (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities or expenses
(joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or contained in the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in the light of
the circumstances under which the statements therein were made, not misleading
or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any state securities law or any rule or regulation under
the Securities Act, the Exchange Act or any state securities law (the matters
in the foregoing clauses (i) through (iii) being collectively referred to as
"Violations"). Subject to Section 5(b) hereof, the Company shall
reimburse the Investor, promptly as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 5(a) shall not (i) apply to any Claims
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement thereto,
if such prospectus was timely made available by the Company pursuant to Section
2(b) hereof; (ii) with respect to any preliminary prospectus, inure to the
benefit of any such person from whom the person asserting any such Claim
purchased the Registered Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to Section 2(b) hereof; (iii) be
available to the extent such Claim is based on a failure of the Investor to
deliver or cause to be delivered the prospectus made available by the Company;
or (iv) apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. The Investor will indemnify the Company, its
officers, directors and agents (including legal counsel) against any claims
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company, by or on
behalf of the Investor, expressly for use in connection with the preparation of
the Registration Statement, subject to such limitations and conditions set
forth in the previous sentence.


 


(b)          Promptly after
receipt by an Indemnified Person under this Section 5 of notice of the
commencement of any action (including any governmental action), such
Indemnified Person shall, if a Claim in respect thereof is to be made against
any indemnifying party under this Section 5, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person, as the case may be; provided,
however, that an Indemnified Person shall have the right to retain its
own counsel with the reasonable fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified
Person and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person and any other
party represented by such counsel in such proceeding. In such event, the
Company shall pay for only one separate legal counsel for the Investor selected
by the Investor. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person
under this Section 5, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action. The indemnification required
by this Section 5 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such expense, loss,
damage or liability is incurred and is due and payable.


  










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6.             Contribution.         To the extent
any indemnification by an indemnifying party is prohibited or limited by law,
the indemnifying party agrees to make the maximum contribution with respect to
any amounts for which it would otherwise be liable under Section 5 to the
fullest extent permitted by law; provided, however, that (a) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section 5
and; (b) no seller of Registered Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registered Securities who
was not guilty of such fraudulent misrepresentation.


 


7.            Reports under
Exchange Act. With a view to making available to the Investor the benefits of
Rule 144 promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the Investor to sell
securities of the Company to the public without registration ("Rule
144"), the Company agrees to use its commercially reasonable efforts to:


 


(a)          make and keep
public information available, as those terms are understood and defined in Rule
144;


 


(b)          file with the
SEC in a timely manner all reports and other documents required of the Company
under the Securities Act for so long as the Company remains subject to such
requirements, and the filing of such reports is required for sales under Rule
144;


 


(c)          furnish to the
Investor so long as the Investor owns Registered Securities, promptly upon
request, (i) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) unless available to the Investor without charge through EDGAR, the SEC's
website or the Company's website, a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration; and


 


 


(d)           at the request
of any Investor of Registered Securities, give its Transfer Agent instructions
(supported by an opinion of Company counsel, if required or requested by the
Transfer Agent) to the effect that, upon the Transfer Agent’s receipt from such Investor of:


 


(i) a
certificate (a “Rule 144
Certificate”) certifying (A)
that such Investor has held the shares of Registered Securities which the
Investor proposes to sell (the “Securities Being
Sold”) for a period of not less than (6)
months and (B) as to such other matters as may be appropriate in accordance
with Rule 144 under the Securities Act, and


 


(ii) an opinion
of counsel acceptable to the Company (for which purposes it is agreed that the
initial Investor’s counsel shall
be deemed acceptable if such opinion is not given by Company counsel) that,
based on the Rule 144 Certificate, Securities Being Sold may be sold pursuant
to the provisions of Rule 144, even in the absence of an effective Registration
Statement, the Transfer Agent is to effect the transfer of the Securities Being
Sold and issue to the buyer(s) or transferee(s) thereof one or more stock
certificates representing the transferred Securities Being Sold without any
restrictive legend and without recording any restrictions on the
transferability of such shares on the Transfer Agent’s books and records (except to the extent any such
legend or restriction results from facts other than the identity of the
Investor, as the seller or transferor thereof, or the status, including any
relevant legends or restrictions, of the shares of the Securities Being Sold
while held by the Investor). If the Transfer Agent requires any additional
documentation at the time of the transfer, the Company shall deliver or cause
to be delivered all such reasonable additional documentation as may be
necessary to effectuate the issuance of an unlegended certificate.  


 


8.           Miscellaneous. 


 


(a)          Registered
Owners. A person or entity is deemed to be a holder of Registered Securities
whenever such person or entity owns of record such Registered Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registered Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registered
Securities.








 










 








 










  


(b)          Rights
Cumulative; Waivers. The rights of each of the parties under this Agreement are
cumulative. The rights of each of the parties hereunder shall not be capable of
being waived or varied other than by an express waiver or variation in writing.
Any failure to exercise or any delay in exercising any of such rights shall not
operate as a waiver or variation of that or any other such right. Any defective
or partial exercise of any of such rights shall not preclude any other or
further exercise of that or any other such right. No act or course of conduct
or negotiation on the part of any party shall in any way preclude such party
from exercising any such right or constitute a suspension or any variation of
any such right.


 


(c)          Benefit;
Successors Bound. This Agreement and the terms, covenants, conditions,
provisions, obligations, undertakings, rights, and benefits hereof, shall be
binding upon, and shall inure to the benefit of, the undersigned parties and
their successors.


 


(d)          Entire
Agreement. This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof. There are no promises, agreements,
conditions, undertakings, understandings, warranties, covenants or representations,
oral or written, express or implied, between them with respect to this
Agreement or the matters described in this Agreement, except as set forth in
this Agreement and in the other documentation relating to the transactions
contemplated by this Agreement. Any such negotiations, promises, or
understandings shall not be used to interpret or constitute this Agreement.


 


(e)          Amendment. Any
provision of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and Investor.
Any amendment or waiver affected in accordance with this Section 9 shall be
binding upon the Company.


 


(f)          Severability.
Each part of this Agreement is intended to be severable. In the event that any
provision of this Agreement is found by any court or other authority of
competent jurisdiction to be illegal or unenforceable, such provision shall be
severed or modified to the extent necessary to render it enforceable and as so
severed or modified, this Agreement shall continue in full force and effect.


 


(g)          Notices.  Any
and all notices or other communications or deliveries to be provided by the Investor
hereunder shall be in writing and delivered personally, by facsimile, by email
attachment, or sent by a nationally recognized overnight courier service,
addressed to the Company, at the address set forth below, or such other
facsimile number, email address, or address as the Company may specify for such
purposes by notice to the Holder delivered in accordance with this Section
8(g).  Any and all notices or other communications or deliveries to be provided
by the Company hereunder shall be in writing and delivered personally, by
facsimile, by email attachment, or sent by a nationally recognized overnight
courier service addressed to the Investor at the facsimile number or email
address or address of the Investor set forth below.  Any notice or other
communication or deliveries hereunder shall be deemed given and effective on
the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment to the
email address set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on any date, (ii) the next Trading Day after the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number or email attachment to the email address set forth on the
signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (iv) upon actual receipt by the party
to whom such notice is required to be given. The addresses for such
communications shall be:


 


If to the Company:


HPIL HOLDING


3738 Coach Cove


Sanford MI 48657


info@hpilholding.com


 


If to the Investor:










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Kodiak Capital
Group, LLC


260 Newport Center Drive


Newport Beach, CA 92660


info@kodiakfunds.com


 


Either party hereto may from time to
time change its address or email for notices under this Section 8(g) by giving
at least ten (10) days' prior written notice of such changed address to the
other party hereto.


  


(h)          Governing Law. This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the Company and the Investor shall be governed, construed and
interpreted in accordance with the laws of the State of California, without
giving effect to principles of conflicts of law. Each of the Company and
Investor hereby submit to the exclusive jurisdiction of the United States
Federal and state courts located in California with respect to the the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein.


 


(i)          Consents. The
person signing this Agreement on behalf of each party hereby represents and
warrants that he has the necessary power, consent and authority to execute and
deliver this Agreement on behalf of that party.


 


(j)          Further
Assurances. In addition to the instruments and documents to be made, executed
and delivered pursuant to this Agreement, the parties hereto agree to make,
execute and deliver or cause to be made, executed and delivered, to the
requesting party such other instruments and to take such other actions as the
requesting party may reasonably require to carry out the terms of this
Agreement and the transactions contemplated hereby.


 


(k)          Section
Headings. The Section headings in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.


 


(l)          Construction.
Unless the context otherwise requires, when used herein, the singular shall be
deemed to include the plural, the plural shall be deemed to include each of the
singular, and pronouns of one or no gender shall be deemed to include the
equivalent pronoun of the other or no gender.


 


(m)          Execution in
Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by email of a .pdf or telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement. A facsimile transmission or email of a .pdf of this
signed Agreement shall be legal and binding on all parties hereto.


 


[-Signature page
follows-]


  


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 










 










 








 








 


 


 


 


 


 


 


 


IN WITNESS WHEREOF, the parties have
caused this Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.


 


 


COMPANY:


 


HPIL
HOLDING


By:
/s/ Nitin Amersey


Director
and CFO


 


 


INVESTOR:


 


KODIAK
CAPITAL GROUP, LLC


By:
/s/ Ryan Hodson


Managing
Member


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 










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[-Signature page
to Registration Rights Agreement-]